Opportunity Zone

What Is An Opportunity Zone?

Opportunity Zones are low income census tracts nominated by governors and certified by the U.S. Department of the Treasury. The country now has over 8,700 Opportunity Zones in every state and territory. The zones and funds will allow investors to receive tax benefits on currently unrealized capital gains that are invested through Opportunity Funds in eligible census tracts designated as Qualified Opportunity Zones. Gloucester Point, up to Ordinary, Virginia qualify as an Opportunity Zone for current and new investors to develop. 

VA Opp Zone Map

What Are the Benefits?

The sample Investment chart to your right demonstrates the timeline and benefits
  • Temporary tax deferral of capital gains reinvested into a Qualified Opportunity Zone Fund. The deferred gain must be recognized on the earlier of the disposition of the investment or Dec. 31, 2026. 
  • Step-up in basis, which the initial basis in a Qualified Opportunity Zone investment starts at zero. The basis increases by 10 percent with a holding period of five years, and by an additional 5 percent if held for at least seven years, excluding up to 15 percent of the original gain from taxation.
  • Permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. The basis of investment at the time of sale is increased to the fair market value.
Map Point

What Types of Initiatives Qualify?

Rules and Regulations subject to change per U.S. Treasury
  • Qualified opportunity zone stock acquired after Dec. 31, 2017
  • Capital or profits interest in a domestic partnership acquired after Dec. 31, 2017
  • Qualified opportunity zone business property acquired after Dec. 31, 2017
  • Qualified opportunity zone business

What Are Qualified Opportunity Funds?

For information on proposed regulations and guidance click here
  • Private-sector investment vehicles that invest at least 90 percent of their capital in Opportunity Zones.
  • Must be set up as a partnership or LLC.
  • A taxpayer must self-certify on their tax return by completing a form to create an Opportunity Fund. A draft form has been released by the U.S. Treasury.
  • Equity investment derived from an investor’s capital gains from a prior investment.
Opportunity Zone Table